Housing ordinance concessions make sense

The Board of Supervisors has reached a balanced and needed compromise with its amendments to Tuolumne County’s affordable housing rules.
To their credit, supervisors earlier this month resisted building industry pleas to totally scrap the two-year-old inclusionary ordinance or put it on indefinite hold. As originally adopted, the law requires developers of 10 or more lots to make 10 percent of the homes they build affordable by families earning the county’s median income or less.
Such homes now sell for about $220,000 each — down nearly $100,000 since 2005.
In a compromise championed by Supervisor Teri Murrison, the board
voted to allow builders to pay the county an in-lieu fee for every unit
sold rather than actually constructing the affordable homes. Previously
extended only to those who could show a hardship, the fee option is now
available to all developers.
Supervisors have also exempted the smallest builders — those dividing
property into four lots or fewer — from any fees or building
requirements.
The key here is that the inclusionary ordinance maintains its integrity.
Anyone developing five lots or more will pay a fee of $2,190 — one
percent of the cost of an affordable home — for each building permit
issued. For 100 homes, that’s more than $200,000 into the county’s
affordable housing trust fund.
Also, exempting splits of four lots or fewer is unlikely to have
much of an impact on revenue. Last year, for instance, about 20
Tuolumne County lots were created in splits of four or fewer and about
300 by larger subdivisions.
But for the small splitters themselves, the move will save about
$2,000 per unit — a sum that could make a big difference for someone
building their first home.
Pressures to abandon the inclusionary ordinance are understandable.
Development and construction, once major engines in Tuolumne
County’s economy, are sputtering at best. Although reports that the
economy is recovering are often in the news, here in the Mother Lode
unemployment remains high (about 12 percent) and housing starts low.
Consider this: In 2005, at the height of the building boom, the
county issued 415 residential building permits. By last year, that
number had plummeted to 49, and this year just 36 have been issued to
date.
Therefore it is no surprise that builders are looking for relief.
It is also no surprise that they have targeted the county’s
inclusionary ordinance, which has been unpopular with the development
community since it was proposed nearly five years ago.
Early this year, the Building Industry Association asked that the
rules be either scrapped or put on ice until the economy and building
industry improve. Its leaders added that prices of existing homes have
dropped so far that there is no longer a shortage of affordable homes.
But incomes and jobs have dropped with prices during the recession.
Real estate sales are still low, and families below the median still
need help.
Granted, the inclusionary ordinance to this point hasn’t helped much.
Deputy Planning Director Mike Laird said not a single affordable
home has been built under the rules, and little cash is in the housing
trust fund. Although some developers owe homes and cash under the
rules, nothing is required until construction begins.
Scrapping the ordinance, however, would guarantee that nothing will be collected or even owed.
The board’s approach — make reasonable concessions to builders
during tough times while at the same time keeping this well-thought-out
ordinance intact — makes a lot more sense.